Sector News

Sales layoffs may be ahead as Hospira loses fight against Precedex generics

September 9, 2014
Life sciences
Hospira’s reprieve from generic Precedex competition was short-lived. The U.S. district court that temporarily stopped Precedex generics has now decided to let the copycats roll. And that could mean Hospira will soon be sharpening its job-cutting ax.
 
Late last month, Hospira sued Mylan, fellow generics maker Par Sterile Products and the FDA, challenging the agency’s choice to allow Precedex copies to go on sale. The agency had issued an unusual “carve-out” decision that would let the generics companies sell Precedex copies for one of the drug’s two FDA-sanctioned indications.
 
It had been an unexpected blow to one of Hospira’s top products, and the company quickly warned that early generic competition would force it to lay off hundreds of employees.
 
The Biotech Primer: An insider’s guide to the science driving the biotech and pharma industries
 
This 200-page book takes an in-depth look at the biotech industry and the science that drives it. Although the industry itself is constantly changing, these fundamental concepts upon which it is built will remain important for years to come – and decision-makers who understand these fundamentals will be better able to evaluate and predict new trends. Click here to buy today!
U.S. District Judge George Jarrod Hazel issued a restraining order that stopped Mylan and Par copies in their tracks. But now that the court has had time to consider the case, it decided to let the FDA’s generics decision stand.
 
Mylan announced the news today, saying that it would immediately go back to shipping its Precedex copy. Meanwhile, in a Securities and Exchange Commission filing, Hospira said it had appealed the decision and would ask for another restraining order pending appeal.
 
“[A]bsent relief from the Court of Appeals, sales of generic Precedex likely will continue and the FDA may grant additional approvals, both of which will have an adverse impact on the company’s net sales of Precedex and related results of operations,” the company said in its SEC filing.
 
Sterne Agee analyst Shibani Malhotra says 5 generics makers are targeting Precedex, which brought in 11% of Hospira’s sales last year. Malhotra estimates that the drug delivered $320 million to Hospira’s top line last year, and $221 million to the bottom line.
 
And that’s why Hospira raised a red flag about layoffs. The company said in its original lawsuit that, if generic Precedex hit the market, it would have to cut almost all of its sales team dedicated to the product. The company didn’t mention job cuts in today’s SEC filing, but did confirm its earnings guidance for the year, at $2.30 to $2.50 per share.
 
By Tracy Staton
 

Related News

September 23, 2020

Novartis, Siemens to develop blood tests for multiple sclerosis

Life sciences

Siemens Healthineers has inked what it describes as a “master collaboration agreement” with Novartis to help provide diagnostic tests linked to therapies across the drugmaker’s pipeline. To start, the companies […]

September 22, 2020

GSK’s Zejula and AZ’s Lynparza leap toward broader EU approval

Life sciences

GlaxoSmithKline’s Zejula and AstraZeneca’s Lynparza have both moved towards EU approval in new indications after receiving positive opinions from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human […]

September 22, 2020

Roche acquires Irish biotech firm Inflazome

Life sciences

Swiss pharma company Roche is set to acquire Irish biotech firm Inflazome for an upfront payment of $449m (€380m). In addition to the upfront payment, Inflazome is also eligible to […]